Downtown fees proposed for 86% increase

Several sections of Interstate 5 would be covered to link downtown once again to Balboa Park, Bankers Hill and Sherman Heights. But the projected cost of $391.9 million and lack of sufficient funding could delay the dream for decades.
— Google Maps Street View

Several sections of Interstate 5 would be covered to link downtown once again to Balboa Park, Bankers Hill and Sherman Heights. But the projected cost of $391.9 million and lack of sufficient funding could delay the dream for decades.
/ Google Maps Street View

With no more redevelopment funding, downtown planners proposed an 85.9 percent increase in housing development fees Wednesday.

Commercial fees would go up by 22.8 percent and a new transportation fee would be set at the equivalent of $5.42 cents per square foot for an office building.

A Civic San Diego committee approved downtown's new public facilities financing plan, which will require approval by the full board and the City Council. It would raise charges to help cover the cost of 50 acres of new parks, five new and improved fire stations, parking garages, bridges and assorted transportation items.

The public facilities are designed to accommodate a downtown growth over the next 20 years of 53,100 homes, 22 million square feet of more office space, 6 million square of additional retail development and 17,950 more hotel rooms.

"With the demise of redevelopment, the fees have become a very important source of funds for public infrastructure," said Brad Richter, CivicSD's assistant vice president for planning.

No one from the development community objected at the meeting. Janelle Riella, executive vice president of the Downtown San Diego Partnership business group, said downtown boosters don't want to discourage more growth but see little alternative to higher fees.

"There is a need to find a funding stream for these public facilities," she said.

The fees are lower than in some other neighborhoods such as neighboring Barrio Logan ($11,986 per dwelling unit) and Golden Hill ($8,552), even though they may be higher on square-foot basis because downtown housing is typically smaller than in outlying neighborhoods and suburbs. North Park charges $4,293 and Mid-City, stretching from University Heights to Talmadge, $2,545.

Historically, downtown builders did not pay what are called "developer impact fees" that are charged to cover the proportional impact of a development on streets, firehouses, libraries and other facilities. Under redevelopment, their property taxes were diverted into redevelopment accounts to cover such things.

City leaders also wanted to encourage development in the city's central business district that had become blighted since World War II. Suburban builders typically pay facility benefit assessments that can run into the tens of thousands of dollars and fold them into the cost of the finished house.

But when the state dissolved redevelopment agencies in 2011, that funding stream dried up and CivicSD began charging builders to process their projects and looked to impact fees to cover infrastructure.

The one-time fees were were set originally in 2005 at $3,970 per dwelling unit and $2.02 per square foot of commercial space and rose to the current rate of $4,179 for residential units and $2.127 per square foot for commercial.

The new fees would rise to $7,769 per dwelling unit and $2.613 per square foot of commercial space. The new transportation fee would be set at $321 per average daily trip. For a 100,000-square-foot building that generates 1,688 daily trips, that charge would amount to $541,848 or $5.42 per square foot, according to a city fee manual.